It is found by the reporter via his exposure to college campuses, government officials and entrepreneurs that these groups of people often consciously or unconsciously speak more truth.
The Deputy Director of the Chinese Development and Reform Commission Zhang Xiaoqiang states that in 2011 China consumed 50% of the world’s steel, cement and 20% of the world’s energy while its GDP only accounted for 9.5% share of the world’s economy.
China has become the largest country for carbon dioxide and sulfur dioxide emission in the world due to the fact that 70% of China’s energy comes from coal. The current way that China needs large quantities of natural resources for its development is unsustainable.
The seven major industries that China is focusing on developing have accounted for less than 4% of China’s GDP in 2010 and are striving to take an about 8% share in 2015 and around 15% share in 2020.
But Zhang Xiaoqiang also points out that the current system has not yet met the requirements of innovation or developing new industries and it is because Chinese enterprises have not become the drivers of innovation. In 2010, the R&D investment for large and medium-sized industrial enterprises was only at 0.9% of their main business revenue which was far behind the 5% of R&D investment of large enterprises in developed countries. China has not yet formed proper mechanisms of integrating manufacturing, learning and R&D. Additionally, only about one-tenth of China’s scientific research achievements can be converted to industrial applications.
The Vice Minister from Ministry of Science and Technology Zhang Laiwu thinks that China has now reached historical crossroads. Two extreme views are existing. There is strong theoretical support that makes people hard to deny raised by the same person who forecasted the U.S. financial crisis (in 2008) that China is in line for a hard landing in 2013. However, others are saying China will overtake the United States and the time is already predicted to be 2018 which is also considered authoritative.
Zhang indirectly responded to the two views by saying that China’s economy is developing rapidly and a lot of people have blind faith in the government forces. Wasn’t Chinese government strong 30 years ago? It was because of the immature market that it was necessary for the government to intervene however, it can not be always done this way. Government is not the main force of innovation, the market and entrepreneurs are. The Chinese government should first of all deepen the reform to drive the market to a mature level while forego certain power.
Even if the government acts properly, the Angel investor Xue Manzi says, venture failure is inevitable, otherwise it would be “Li Yanhong” everywhere. Success is accidental and it requires enduring efforts, high intelligence and luck at the end.
This article is originally from China entrepreneur magazine in Chinese.